Medicare Advantage and the Low-Income

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Your Weekly Medicare Consumer Advocacy Update
Who Gets the Advantage? False Promises and Hidden Costs

May 17, 2007

  • Volume 7, Issue 20

Low-income people with Medicare enrolled in Medicare Savings Programs (MSPs) receive assistance in paying the out-of-pocket costs of Medicare.

Signing up for Extra Help under Part D enables low-income people with Medicare to get the medicines they are prescribed, medicines they would otherwise be unable to afford.

Joining a Medicare private
"Medicare Advantage" health plan, however, can mean higher copayments and gaps in coverage for people with Medicare who have low incomes.

Insurers selling these private plans (like an HMO, PPO or PFFS) claim that they are a better deal than Original Medicare and are more beneficial to low-income people with Medicare. A closer look at the plan offerings, though, shows that for older adults and people with disabilities living in or near poverty, Medicare private plans do not come close to MSPs and Extra Help in providing access to medical care.

Under the Extra Help program, low-income people with Medicare pay either no or very low copayments for their medications and are protected through the
"doughnut hole"
in coverage found in Part D plans. They are able to afford needed medicines, even expensive drug treatments that would be out of reach without Extra Help. Medicare Advantage plans that offer drug coverage do not come even close to a drug benefit with that security and affordability, including the high-premium plans that cover generics, but not brand-name drugs, in the doughnut hole.

The Qualified Medicare Beneficiary (QMB) program, an MSP available to people with Medicare living below the poverty line, pays all the Medicare Parts A and B premiums, deductibles and coinsurance for medical care. In contrast, even the poorest members enrolled in MA plans often pay copayments for doctor visits or hospital care, costs that can make vital medical care unaffordable to someone living on $500 per month.

Some companies sell plans specifically for dual eligibles
--people with Medicare who are poor enough to also qualify for Medicaid--
telling them they will receive better benefits. Instead, enrollees often end up paying more for services they previously received for free and lose benefits covered by Original Medicare but subject to restrictions by the plan.

Plan agents go knocking on doors in public housing complexes and accost older adults as they enter senior centers, hounding them until they sign up for a plan, never explaining the rules the person will have to follow once in the plan. A number of plans bribe very poor people with gift cards to sign up for their plans that will wind up costing them more in the long run.

Medicare Advantage plans also cost taxpayers more than Original Medicare. Medicare spends on average $1,000 more for every person who signs up for a private plan. In 2007, overpayments will total $7.5 billion. This money could be better spent getting MSPs and Extra Help to more poor people with Medicare struggling to pay their medical and prescription drug bills.

Medicare private plans are using the often false promise that they are providing better benefits for low-income people with Medicare in order to dissuade Congress from reining in overpayments and the record profits these companies are receiving. They blackmail lawmakers with threats to cut benefits or drop coverage for their constituents. Lawmakers need to see through this scam. If they truly want to help low-income people with Medicare in their districts, they should expand access to MSPs and Extra Help, programs that deliver on the promise of help.

Another poorly written article about MA plans. Although I would never do as the writer is saying by switching someone from an MSP, or Medicaid, plan to an MA plan. This part is just ridiculous:

"Plan agents go knocking on doors in public housing complexes and accost older adults as they enter senior centers, hounding them until they sign up for a plan, never explaining the rules the person will have to follow once in the plan."

I would like him to cite where and when this happened.

I don't understand why it has been repeated that MA has cost overruns and is costing more than expected. Wasn't all the MA funding laid out and agreed to before the plan were ever started?
All this stuff seems to have a liberal spin to it.
Yeah I agree that the bad press keeps on spitting out a bad image of the insurance agent. Or that the MA plans are crappy.

I don't believe this door to door canvassing was or is that common. Maybe a couple overzealous agents were caught during OEP and now that story is continually repeated. But i think the poorer recipients may be better off just having Medicare and negotiate the bill with the medical providers. With an MA they have to pay up front, or agree to that bill charges, and they don't always have it. They pay S-L-O-W-L-Y.

Plus they still can get cheaper drugs going thru those Pharma Co's programs. I think the doctor is key factor here. He can really help his poor-not-on-medicaid patients.
Trying to scare seniors sells papers, since they are the ones who typically read them.

Research takes time and may bring up the truth. It is easier to publish it on page one and sell a lot, then apologize for it 3 weeks later on page 17.

The #1 goal in media is to make money. Telling the truth is a nice idea, but scaring the heck out of people makes them rich.
Now it's abuse!

Medicare plans focus of abuses

Sales agents take advantage of seniors, a Senate panel is told.


Published May 17, 2007

Claiming that sales agents are misleading seniors about private Medicare plans, several state insurance commissioners asked Congress on Wednesday for more power to crack down.

"Right now I have more authority to deal with pet insurance than I do with seniors in Medicare plans," Oklahoma Commissioner Kim Holland told a hearing of the Senate Special Committee on Aging. Lack of state control has led to "virtual lawlessness in Oklahoma."

Georgia has arrested agents for forging signatures and signing up dead people, said insurance regulator Sherry Mowell.

Florida officials did not testify but said in interviews that abuse has also been widespread here.

"People go to free lunches and sign in and put down their Social Security number and all of a sudden they find themselves switched (into a private plan) and they don't know how it happened," said Ann Whiting, counselor for Florida's SHINE program, which helps seniors with insurance issues.

People discover the truth when their regular doctor refuses to treat them or when they can't fill a prescription that is not on the plan's formulary, Whiting said.

"We tell them, if they go to a free lunch, do not to put down their Social Security number," she said.

Whiting, one of SHINE's counselors in Pinellas and Pasco counties, said she fielded two or three sales complaints a week during early part of this year.

One woman went to a health fair and stopped by a Medicare plan's booth, Whiting said. "The agent said, 'Please sign this. If you don't sign, my boss won't accept that I talked to you.' She didn't read it and she was signing herself up."

Particularly vulnerable are poor older and disabled people on Medicaid and Medicare. They have no Part B Medicare premiums, no deductibles and very low co-payments for services -- as long as they stay on traditional Medicare. On many private plans, they can end up paying $30 every time they see a doctor.

Kathryn DeLong helps poor residents of St. Petersburg's Lutheran Apartments navigate Medicare and other social services.

"After the whole plan fiasco, I don't let insurance people in the building anymore. They call and ask to make a presentation and I say 'We don't need any more talk about insurance,'" she said.

One resident signed up for a new product called "private fee for service," where plans pay doctors and hospitals on a per-visit basis, rather than having an HMO-like network.

An agent told the resident "he could see any doctor or go to any hospital and any pharmacy he chose," DeLong said. Unfortunately, many health care providers won't accept those payments.

"His bills were not getting paid. He could not get his prescriptions filled, and lo and behold, he found out he could not go to any of his providers."

DeLong declined to identify the agents or companies involved.

Florida's Office of Insurance Regulation has received 148 complaints about Medicare sales, mostly since late 2006, said investigations chief Barry Lanier.

"The most common pattern is people not realizing they are disenrolling" from traditional Medicare, he said. "All it takes is a signature."

With most insurance, states can hold companies responsible for agent conduct. But when Congress rewrote Medicare law three years ago, the federal government got sole authority over how private plans conduct sales.

States can sanction agents but not companies. Like state regulators who testified Wednesday, Florida insurance regulators would like more power to regulate companies when sales abuses become a pattern, said senior economist Ray Spudeki.

"We don't like the idea of Florida consumers being taken advantage of," Spudeki said.

Sen. Herb Kohl, a Wisconsin Democrat who chairs the aging committee, said he would draft legislation to expand state authority. "This is simply unacceptable," he said.

Medicare HMOs have been around for decades. Because the government pays private plans up to 19 percent more per person than on traditional Medicare, HMOs often provide extra benefits like eyeglasses and hearing aids.

Recently, new types of private plans have complicated Medicare's landscape, including drug plans, PPOs and the new "private fee-for-service" plans.

In addition, Medicare now locks people into their choice for most of the year. In the past, people could switch back to traditional Medicare within weeks if a private plan displeased them.

That change created a marketplace where agents could earn sizable commissions, because anyone who signed up could be stuck until the end of the year.

Abby Block, director of Medicare's Center for Beneficiary Choices, told the senators that "the vast majority" of people are satisfied with their private plans, which now cover one-fifth of the people on Medicare.

She acknowledged that sales abuses have occurred, but said the federal government needs to maintain its oversight. Next year, she said, Medicare will require "specific, unambiguous language in all marketing materials" that describe what private plans cover and don't cover.

Companies also will have to call everyone who signs up, to make sure they understand their plan and really want it.

"We believe very strongly we need to get this under control," Block said. "But I don't want to see the whole program disparaged because of the behavior of some bad apples."

Fast Facts:

If you need help

- Florida's SHINE program helps seniors with insurance issues. Call toll-free 1-800-963-5337 between 8 a.m. and 5 p.m. and ask for SHINE. Someone will take your name and a volunteer will call you back.

- To report sales abuses, contact the Florida Office of Insurance Regulation consumer hotline at 1-800-342-2762.

- People who have been enrolled in a private Medicare plan through fraud or deceit may seek a special waiver to switch out of that plan, even after regular enrollment has closed. Call Medicare at 1-800-633-4227 and ask for an agent. If the person answering does not know about this appeal process, insist on talking to a supervisor.

© 2007 · St. Petersburg Times

The ignorance manifested in the first article is appalling. If someone has extra help, they will have it with the MAPD as well. The writer doesn't seem to understand that even if someone is dual eligible or has extra help, they still have to be enrolled in a Part D plan, all of which are available only through private insurance companies. A MAPD is just another way to receive Part D benefits, only it has Part C attached in an "all in one plan".

The only way someone with extra help (not talking here about full Medicaid or QMB) comes out better overall with Original Medicare vs. MA is if 1) They never use it at all or 2) All of their providers simply accept Medicare's payment and then write off the member's coinsurance amounts. #2 seems to be happening less and less as time goes on.
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Another poorly written article about MA plans. Although I would never do as the writer is saying by switching someone from an MSP, or Medicaid, plan to an MA plan. This part is just ridiculous:

"Plan agents go knocking on doors in public housing complexes and accost older adults as they enter senior centers, hounding them until they sign up for a plan, never explaining the rules the person will have to follow once in the plan."

I would like him to cite where and when this happened.

I have personally heard several agents tell me they go door to door leading with Med Supps and then switching to MA if it is a better fit.

A few months ago I had an appointment with a woman who unbeknownst to her had been enrolled in an MA plan. I just happened to see the enrollment kit on the counter and asked to see it. She said she remembered the agent coming by but didn't enroll. They enrolled her husband too even though he wasn't there and has group. Assuming she was correct, as the article stated, there's no way that could have happened without the agent having their SS#'s and probably Medicare card information too.
You are wrong on several accounts with this article. Low income beneficiaries enrolled in the Medicare Savings Plan are protected under Title XIX which states all MA organizations are responsible for ensuring that they do not impose cost sharing amounts on their dual eligible members that exceed the amount of cost sharing that would be permitted with respect to the individual under title XIX if the individual were not enrolled in an MA plan. In addition, all MA plans with dual eligible enrollees must inform providers and include in their provider contracts that dual eligible enrollees will not be responsible for any plan cost sharing for Medicare A and B services when the state is responsible for paying those amounts. Additionally, the contracts with providers should state that the provider will do this either by accepting the MA plan payment as payment in full or by billing the appropriate state source. Ok. Lets stick to the facts and not your opinions.